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Statistics

November 16, 2006

Net Metering: "Freeing the Grid"

The Network for New Energy Choices (NNEC) report "Freeing the Grid,” is the first report ever to rank and grade the effectiveness of 34 state programs designed to help homeowners and small businesses generate their own distributed energy and sell the excess back to the central transmission grid. These ‘net metering’ programs have been described as having the most potential of any policy tool at any level of government to “green” American electricity sources.

“Every homeowner and every small business is a potential source of reliable, renewable electricity for their community,” noted NNEC Executive Director Chris Cooper. “Smart utilities realize that we will have to tap all of these small sources to meet future demand.”

By comparing regulations with customer participation rates, NNEC was able to identify which states had the best programs and which states had the worst (and why).

New Jersey ranked first out of 34 states with net metering programs. Indiana and Arkansas were profiled as states with “worst practices”. Oklahoma ranked last. Read the report to find out what your state is doing to require net-metering.

The Network for New Energy Choices (NNEC) is committed to providing state and local governments with new ideas and useful information to promote clean, affordable power from local, renewable energy sources. NNEC is promoting creative ideas for financing community-based clean energy, helping to dispel misinformation about renewable energy in the media and advocating for critical utility policy reforms that will usher in a new world of energy choices for all Americans.

While I applaud NNEC's efforts to encourage distributed energy, it is only part of the answer to our energy problem. I do not agree that net metering has "the most potential of any policy tool at any level of government to “green” American electricity sources." Energy conservation through the encouragement of plug-in hybrid vehicles and energy efficient homes using high efficiency lighting (compact fluorescent lights) and higher insulation standards for new homes could have a greater effect in a shorter time period. Net metering and higher insulation standards need legislation to require them, which takes time and is why organizations like NNEC are needed. Government research money for batteries and purchase, not subsidies, of hybrid and plug-in vehicles is perhaps the best use of taxpayer dollars in the field of energy.

Comments

Users should not have to choose between conservation and net metering. Both approaches should be actively promoted.

It has been proven over and over again that a good conservation program can reduce energy consumption by 25% to 40%.

Net metering could help when 10++ million PHEVs and/or BEVs and 100++ solar panels are connected. Decentralized energy sources would contribute (at higher price) during the daily peaks and recharge at night (at lower price) when power grids are not fully used. It could be a win-win situation.

I have written about a blog by a New Jersey homeowner who installed solar electric panels that provide 2/3rds of his power and have an 8 year payback period, thanks to the excellent support from the state.

Net metering is part of that policy, but if you read his blog, you will notice that the policy in New jersey of giving the Solar Renewable Energy Credits (SREC) to the homeowner to sell, instead of the power company has yeilded him 1200 dollars extra per year, a huge factor in the short payback period.

Here's the link, I think the net metering effort needs to also embrace this energy credit issue as well.

James:
You wrote "Energy conservation through the encouragement of plug-in hybrid vehicles ... could have a greater effect in a shorter time period."

Actually the two go together. Net metering (and smart metering in general) will be an important enabler for the development of conservation and also plug-in hybrids. In particular, utilities are genuinely interested in the V2G (vehicle to grid) concept, in which plugged-in vehicles provide distributed resources for grid support. This is not far fetched and has measureable economic and engineering benefits, but it depends on advanced metering, including net metering.

I interviewed Martin Eberhart, CEO of Tesla Motors, a couple of weeks ago, and he identified advanced metering as a key policy issue affecting the future of electric vehicles.

Subsequently I interviewed one of the country's foremost experts on advanced-metering policy, and he said he was only vaguely aware of the synergy between advanced metering and electric vehicles. In sum, the metering guys and the EV/PHV guys really need to get together and go bowling or something. They are definitely on the same team, but not all of them know it!

Instead of focusing on this type of metering for residentials, the real push should be in the industrial sector. Industrial load would be the most sensitive to demand response.

I also think that rates throughout the country need to be written in such a way to encourage better energy practices by residentials. Here in NE Ohio, there is no peak load penalties for residential customers.

I Don't know much about net metering etc, but I heartly agree with the conservation aspect. Local governments could make a great conversation effort by reducing street lighting and enacting zoning ordnances to reduce retail electrical signage.

Street lights are run and non-peak times and has a very small inpact. Retail electric signage is also nominal. Any local impact on electrical demand would come with curbing AC usage by residential and commercial customers.

Certainly conservation and net metering can go hand in hand. However, nothing about conservation alone helps to "green" U.S. electricity sources. Conservation simply uses LESS of a dirty thing (fossil-fuel based electricity). It doesn't help transition generation to new, cleaner sources.

The interesting thing about net metering small-scale renewable DG installations is that you get two bangs for the same effort. Net Metering decreases demand on the central grid (conservation), while increasing the amount of renewable generation ("greening" sources). So, in many ways promoting net metering is BOTH.

Unfortunately, this report makes a causation error in their rankings, which are driven more by incentive programs than any correlation with the quality of a net metering regulation, and which wasn't corrected for...Nice idea but limited execution.